Some interesting opinions on PYM as usual. Its definitely been in a holding pattern. Would you expect anything else with the current state of global energy pricing? This is the interesting thing in my mind. These chaps were, as far as I can see, on their knees less than 12 months ago. No cash to push forward, a trail of unlucky completion attempts at a deep and expensive project and a lack of support from the market full stop. That was less than 12 months ago. Its interesting to consider what the "reasonable man" would have done if in the same position as the PYM board and management? With no cash and no support and a hard road ahead what would the reasonable man do? Liquidate? Go to tech? Just sit there and give up? Its a perplexing question really and I'm pretty sure there will be a range of different views. I bet none of us (Cougartrading, TheBanker, Goldencross) would have just thrown the towel in? Would we? I think this is what the market in general misses here and in a lot of small comps. These guys, along with us, are risk takers. But they are risk takers because they have skin in the game. So, when they spend 100's of hours running DD on projects and then 1000's of hours planning wells and running G&G they don't do it for a $200k salary. They do it for the simple reason they if the company succeeds they succeed. I have in the past been very critical of some of these small cap guys. Some of them deserve it. I've looked back at this company and one of the things that greatly impressed me is that they are still here, pushing on and apparently now having some wins. Sure, we have all been diluted but we all took a punt on what could be. At least these chaps are out there trying and trying again. I give them kudos for that. You are only as good as your last well in this game and these guys are looking quite good right now. Forget the stale bulls and angry people that hold grudges and are pi**ed at management. The only person to blame for losing money in an investment on an exchange in a company that drills for oil/gas is the investor. If you are prepared to take the risk then all of us need to be prepared to lose. Thats my view. I put cash into WEL.....halved my $$$ in 6 months. I held NSE on the back of EF acreage until I saw the Dec qtrly...I've blown up a lot of cash on a lot of companies over the years but I'm still here...why? Well like drilling an 18,000 ft vertical wildcat well into an untested deep formation.....you only need one to come in to pay for all the ones that didn't. So, I say bully to these chaps and lets see where we are when the oil prices are back in the $80's . Could be interesting.
On oil price dynamics its an interesting time - I've always held the view that as the US became a net exporter we would start to see larger issues in the Middle East. Why would the US, who really are the protector in a military sense of over half the planet, retain such a massive presence in the Middle East protecting energy assets of allies when they no longer needed to? You add in the Obama administrations left wing socialist undertone government and this was always bound to happen. Stability in the ME is a crucial factor in energy dynamics. If there is a declining presence of the big boy (USA) then the opportunists move in. US out of Iraq, wammo. Now we have a flare up in Yemen and the Saudis are very worried. Look back at what the Saudi royal family did during the Arab spring. For fear of a spread into their Kingdom they made huge efforts to ensure that their people were happy...how? free everything. No taxes already but free housing, grants, education and the list goes on. In the UAE they doubles everyone's wages ( the guy who checks your passport as you leave is on $200k US) Imagine what happens if the the problems in Yemen head north? Its a low probability but look at whats going on in the gulf of Aden...US and Iranian war ships are amassing. If this does escalate to Saudi- $100 oil is cheap. Still I'm being more negative than I should be. What I'm getting at is that while the likes of PYM are in the dog-house along with 98% of other listed energy explorers that could change quite quickly without the required economic growth fundamentals even required. If you are an energy investor I'd suggest looking at these scenarios as part of a holistic approach to your investing. Look at what Petsec are up to? I have not rated this company highly at all in the past for many many reasons. But now, well I'm thinking they may be interesting at some stage. They are acquiring assets in Yemen! Crazy right? Probably. But the best time to acquire assets is when they are cheap, and every body else is leaving. You have to give these guys kudos for tenacity. Or they know something we don't know. Its a risk, but look at the rewards...when it settles down they are a big boy all of a sudden. Thats what i love about this sector. The people that keep on trying, I rate. Its a tough sector with many many failures. Luck and persistence is what counts. You should all buy a ticket to NAPE in Houston in Feb 2016 - you can find some amazing plays and meet the people at the heart of the industry who one day had nothing to their name and the next day their last dollar went into the highest risk you can imagine.....G5 out the front.
few links for you all to check out;
http://af.reuters.com/article/energyOilNews/idAFL5N0XJ0EA20150422
http://napeexpo.com/
These are my views alone. Just thoughts and theories.
